1chapter 9 marketing 7e lamb hair mcdaniel ©2004 south-western/thomson learning product concepts...
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1 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product ConceptsProduct Concepts
Prepared byPrepared byDeborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
Chapter 9
2 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning ObjectivesLearning Objectives
1. Define the term product.
2. Classify consumer products.
3. Define the terms product item, product line, and product mix.
4. Describe marketing uses of branding.
3 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(continued)
5. Describe marketing uses of packaging and labeling.
6. Discuss global issues in branding and packaging.
7. Describe how and why product warranties are important marketing tools.
4 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Define the term product.
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On Linehttp://www.coleman.com
On Linehttp://www.coleman.com
5 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
ProductProduct
Everything, both favorable
and unfavorable, that
a person receives
in an exchange.
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6 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
What Is a Product?What Is a Product?
PromotionPromotion
Place (Distribution)Place (Distribution)
PricePrice
Product Product Product is the “heart” of
Marketing Mix
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7 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Classify consumer products.
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8 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product ClassificationsProduct Classifications
BusinessBusinessProductProduct
BusinessBusinessProductProduct
Consumer Consumer ProductProduct
Consumer Consumer ProductProduct
A product used to manufacture other goods or services, to facilitate an
organization’s operations, or to resell to other consumers.
A product used to manufacture other goods or services, to facilitate an
organization’s operations, or to resell to other consumers.
Product bought to satisfy an individual’s personal wants
Product bought to satisfy an individual’s personal wants
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9 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Types of Consumer ProductsTypes of Consumer Products
UnsoughtProducts
UnsoughtProducts
SpecialtyProductsSpecialtyProducts
ShoppingProducts
ShoppingProducts
ConvenienceProducts
ConvenienceProducts
ConsumerProducts
ConsumerProducts
BusinessProductsBusinessProducts
PRODUCTSPRODUCTS
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10 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Types of Consumer ProductsTypes of Consumer Products
ConvenienceProduct
ConvenienceProduct
ShoppingProduct
ShoppingProduct
SpecialtyProduct
SpecialtyProduct
UnsoughtProduct
UnsoughtProduct
A relatively inexpensive item that merits little shopping effort.A relatively inexpensive item that merits little shopping effort.
A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.
A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.
A particular item that consumerssearch extensively for and are reluctant to accept substitutes.
A particular item that consumerssearch extensively for and are reluctant to accept substitutes.
A product unknown to the potential buyer or a known product that the buyer does not actively seek.
A product unknown to the potential buyer or a known product that the buyer does not actively seek.
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11 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Define the terms product item, product line, and product mix.
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12 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product Items, Lines, and Product Items, Lines, and MixesMixes
Product ItemProduct Item
Product LineProduct Line
Product MixProduct Mix
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A group of closely-related product items.
A group of closely-related product items.
All products that an organization sells.
All products that an organization sells.
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On Linehttp://www.marriott.com
On Linehttp://www.marriott.com
13 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Gillette’s Product Lines and Gillette’s Product Lines and MixMix
Blades and Writingrazors Toiletries instruments Lighters
Mach 3 Series Paper Mate CricketSensor Adorn Flair S.T. Dupont Trac II ToniAtra Right GuardSwivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry LookTwin Injector Dry Idea Techmatic Brush Plus
Width of the product mixWidth of the product mix
De
pth
of
the
pro
du
ct
line
sD
ep
th o
f th
e p
rod
uc
t lin
es
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14 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Benefits of Product LinesBenefits of Product Lines
Equivalent QualityEquivalent Quality
Efficient Sales andDistribution
Efficient Sales andDistribution
Standardized Components
Standardized Components
Package UniformityPackage Uniformity
Advertising EconomiesAdvertising Economies
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15 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product Mix WidthProduct Mix Width
Diversifies risk
Capitalizes on established reputations
The number of product
lines an organization offers.
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16 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product Line DepthProduct Line Depth
Attracts buyers with different preferences
Increases sales/profits by further market segmentation
Capitalizes on economies of scale
Evens out seasonal sales patterns
The number of product
items in a product line.
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17 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Adjustments Adjustments
Product Modification
Product Modification
ProductRepositioning
ProductRepositioning
Product LineExtension or Contraction
Product LineExtension or Contraction
Adjustments to Adjustments to Product Items,Product Items,
Lines, and MixesLines, and Mixes
Adjustments to Adjustments to Product Items,Product Items,
Lines, and MixesLines, and Mixes
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On Linehttp://www.unilever.com
On Linehttp://www.unilever.com
18 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Types of Product Types of Product ModificationsModifications
Quality Modification
Quality Modification
Functional ModificationFunctional
Modification
Style Modification
Style Modification
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19 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Planned ObsolescencePlanned Obsolescence
The practice of modifying
products so those that
have already been sold
become obsolete before
they actually need
replacement.
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20 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
RepositioningRepositioning
Changing Demographics
Changing Demographics
Declining SalesDeclining Sales
Changes in Social
Environment
Changes in Social
Environment
Why reposition Why reposition established brands?established brands?
Why reposition Why reposition established brands?established brands?
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21 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product Line ExtensionProduct Line Extension
Adding additional products
to an existing product line
in order to compete more
broadly in the industry.
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22 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product Line ContractionProduct Line Contraction
Some products have low sales or cannibalize sales of other items
Resources are disproportionately allocated to slow-moving products
Items have become obsolete because of new product entries
Symptoms of Symptoms of Product Line Product Line
OverextensionOverextension
Symptoms of Symptoms of Product Line Product Line
OverextensionOverextension
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23 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe marketing uses of branding.
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24 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
BrandBrand
A name, term, symbol,
design, or combination
thereof that identifies a
seller’s products and
differentiates them from
competitors’ products.
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25 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
BrandingBranding
Brand Name
Brand Name
BrandMark
BrandMark
Brand EquityBrand Equity
That part of a brand that can be spoken, including letters, words, and numbers.
That part of a brand that can be spoken, including letters, words, and numbers.
The elements of a brand that cannot be spoken.
The elements of a brand that cannot be spoken.
The value of company and brand names.The value of company and brand names.
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26 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Benefits of BrandingBenefits of Branding
Product Identification
Product Identification Repeat SalesRepeat Sales New Product
SalesNew Product
Sales
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On Linehttp://www.tide.com
On Linehttp://www.tide.com
27 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
An Effective Brand NameAn Effective Brand Name
Is easy to pronounce
Is easy to recognize and remember
Is short, distinctive, and unique
Describes the product, use, and benefits
Has a positive connotation
Reinforces the product image
Is legally protectable
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28 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
The World’s Most Valuable The World’s Most Valuable BrandsBrands
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29 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Branding StrategiesBranding Strategies
BrandBrand No BrandNo Brand
Manufacturer’s Brand
Manufacturer’s Brand Private BrandPrivate Brand
IndividualBrand
IndividualBrand
Family Brand
Family Brand
Combi-nation
Combi-nation
IndividualBrand
IndividualBrand
Family Brand
Family Brand
Combi-nation
Combi-nation
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30 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Generic BrandGeneric Brand
A no-frills, no-brand-name,
low-cost product that is
simply identified by its
product category.
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31 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Manufacturers’ Brands VersusManufacturers’ Brands VersusPrivate BrandsPrivate Brands
Manufacturers’ Manufacturers’ BrandBrand
Manufacturers’ Manufacturers’ BrandBrand
Private Private BrandBrand
Private Private BrandBrand
The brand name of a manufacturer.
The brand name of a manufacturer.
A brand name owned by a wholesaler or a retailer. Also
known as a private label or store brand.
A brand name owned by a wholesaler or a retailer. Also
known as a private label or store brand.
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32 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Advantages of Advantages of Manufacturers’ BrandsManufacturers’ Brands
Develop customer loyalty
Attract new customers
Enhance prestige
Offer rapid delivery, can carry less inventory
Ensure dealer loyalty
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33 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Advantages of Advantages of Private BrandsPrivate Brands
Earn higher profits
Less pressure to mark down prices
Manufacturer may drop a brand or become a direct competitor to dealers
Ties customer to wholesaler or retailer
No control over distribution of manufacturers’ brands
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34 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Individual Brands VersusIndividual Brands VersusFamily BrandsFamily Brands
Individual Individual BrandBrand
Individual Individual BrandBrand
Family Family BrandBrand
Family Family BrandBrand
Using different brand names for different products.
Using different brand names for different products.
Marketing several different products under the same
brand name.
Marketing several different products under the same
brand name.
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35 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
CobrandingCobranding44
On Linehttp://www.kelloggs.comhttp://www.disney.com
On Linehttp://www.kelloggs.comhttp://www.disney.com
IngredientBranding
IngredientBranding
Cooperative Branding
Cooperative Branding
Complementary Branding
Complementary Branding
Types of CobrandingTypes of CobrandingTypes of CobrandingTypes of Cobranding
On Linehttp://www.postcereal.comhttp://www.quakeroats.com
On Linehttp://www.postcereal.comhttp://www.quakeroats.com
36 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
TrademarksTrademarks
Many parts of a brand and associated symbols qualify for trademark protection
The mark has to be continuously protected
Rights continue for as long as it is used
A Trademark is the A Trademark is the exclusive right to exclusive right to
use a branduse a brand
A Trademark is the A Trademark is the exclusive right to exclusive right to
use a branduse a brand
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37 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe marketing uses of packaging and labeling.
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38 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
PackagingPackaging
FunctionsFunctionsofof
PackagingPackaging
FunctionsFunctionsofof
PackagingPackaging
Contain and ProtectContain and Protect
PromotePromote
Facilitate Storage, Use, and Convenience
Facilitate Storage, Use, and Convenience
Facilitate RecyclingFacilitate Recycling
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39 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
LabelingLabeling
PersuasivePersuasive
Focuses on promotional theme
Information is secondary
InformationalInformational
Helps make proper selections
Lowers cognitive dissonance
Includes use/care
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On Linehttp://www.fda.gov
On Linehttp://www.fda.gov
40 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Universal Product CodesUniversal Product Codes
A series of thick and thin
vertical lines (bar codes),
readable by computerized
optical scanners, that
represent numbers used
to track products.
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41 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss global issues in branding and packaging.
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42 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Global Issues in BrandingGlobal Issues in Branding
Adaptations & Modifications
Adaptations & Modifications
Global Options Global Options for Brandingfor Branding
One Brand NameEverywhere
One Brand NameEverywhere
Different Brand Names for
Different Markets
Different Brand Names for
Different Markets
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43 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Global Issues in PackagingGlobal Issues in Packaging
AestheticsAesthetics
Global Global Considerations Considerations for Packagingfor Packaging
Climate Considerations
Climate Considerations
LabelingLabeling
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44 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe how and why product warranties are important marketing tools.
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45 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product WarrantiesProduct Warranties
WarrantyWarranty
ExpressWarrantyExpressWarranty
Implied WarrantyImplied
Warranty
A confirmation of the quality or performance of a good or service.A confirmation of the quality or performance of a good or service.
A written guarantee.A written guarantee.
An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)
An unwritten guarantee that the good or service is fit for the purpose for which it was sold. (UCC)
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46 Chapter 9 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product WarrantiesProduct Warranties
WarrantiesWarrantiesWarrantiesWarranties
Written Guarantee
Implied Implied WarrantyWarrantyImplied Implied WarrantyWarranty
Express Express WarrantyWarrantyExpress Express WarrantyWarranty
Unwritten Guarantee
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On Linehttp://www.landsend.comhttp://www.llbean.com
On Linehttp://www.landsend.comhttp://www.llbean.com